Mutual backscratching can take many forms

SCMP August 20 2007

It is not usual to use one column to defend a previous one. But given that my last resulted in four letters from government officials, a reply is in order on my allegation of collusion between government and big business and the existence of sophisticated forms of corruption.

If you have evidence of corruption, show it, demands the chief executive's spokesman. I recollect that was the kind of answer that was given to the likes of Elsie Elliot (Tu) when they campaigned against police corruption in the 1960s and early 1970s. Eventually the government was forced to admit that syndicated corruption was endemic. The Independent Commission Against Corruption was set up to address it.

The whole point of corruption involving officials and businessmen is that evidence is hard to come by, as both profit from it. That is even more the case when payoffs are indirect and delayed - for example by provision of sinecures in the future. Nor is corruption necessarily criminal; there is a large grey area.

That Hong Kong is viewed as relatively free of corruption does not mean that it does not exist in sectors where rewards are high and transparency is low.

As for the ICAC's claim of independence, that this is enshrined in law does not make it a reality. It takes guts or a nothing-to-lose position to fight official tendencies to indulge large favour-seeking companies.

Collusion, mutual backscratching and actual corruption can take many forms, and sometimes becomes apparent in the extraordinary billion-dollar "mistakes" that government departments make from time to time - which mysteriously almost always seem to benefit major developers, often advised by ex-officials, at the public expense.

The movement of senior bureaucrats into positions in the private sector close to government decision-making is a serious problem. There are dozens of former civil servants who have moved either into the private sector (almost always to companies dealing with the government, not with export industries) or to government-controlled quangos which do deals with developers and utilities. Unless the Tsang administration bars such transfers, the assumption of collusion will remain.

The chief executive might also look to his own transparency. The list of contributors to his re-selection campaign reads like a pecking order of vested interests. It is headed by New World group, the employer of his brother.

According to financial markets watchdog David Webb, New World/Cheng Yu-tung avoided the HK$50,000 supposed limit on Donald Tsang Yam-kuen's campaign contributions by making some 30 separate ones through subsidiaries and affiliates. Cheung Kong (SEHK: 0001), Henderson and Sino Land also gave large amounts in this way.

Political donations are about influence, especially in undemocratic systems where vested interests - the functional constituencies - are integral.

Unless the administration makes a genuine effort to distance itself from the private sector and either privatise quangos or make them accountable arms of government, suspicions will flourish.

Take the Bauhinia Foundation, a think-tank "close to the chief executive" and stuffed with former civil servants and members of quangos. It is throwing its weight behind a curious project to turn formerly Shenzhen-owned borderland into a special development zone.

As Jake van der Kamp has pointed out in the South China Morning Post (SEHK: 0583, announcements, news) , ownership of this land, and hence the beneficiaries of the Hong Kong government spending billions to enable its development, remains obscure.

Government policies which preclude the proper operation of competitive market forces, placing power in the hands of officials and oligarchies, are the basis of collusion and are a seed-bed of corruption, however defined.





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